Chaos Over a Plunging Note

Complex Security Drops 60% in Value in Past Week; SEC Is on the Case

Regulators are examining volatile trading in a complex exchange-traded note that caused it to lose 60% of its value in the past week, Tom Lauricella reports on Markets Hub. (Photo: Reuters/Brendan McDermid)

By

Tom Lauricella,

Jean Eaglesham and

Chris Dieterich

Updated March 29, 2012 1:20 p.m. ET

Regulators are examining volatile trading in a complex exchange-traded note that caused it to lose 60% of its value in the past week.

The Securities and Exchange Commission is looking into the VelocityShares 2x Long VIX Short Term Exchange note, managed by Credit Suisse Group AG, which had about $700 million in assets before the decline, according to people familiar with the matter. The SEC review is preliminary, the people said.